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Amazon's soaring revenues depress Wall Street

Stock tumbles on 15 per cent sales leap

Amazon continues to prove that a melting economy doesn't necessarily mean you can't continue to expand sales on the world's largest etail site. During the second quarter ending June 30, the company pulled in revenues of $4.65 billion, a fifteen per cent jump from the same quarter last year.

But this wasn't enough to satisfy the Wall Street guessmen, who'd guessed that revenues would be higher. And thanks to a $51m payment to settle a lingering dispute with former etail partner Toys R Us, Amazon's profits topped out at $142 million, a 10 per cent year-on-year drop.

During a conference call and webcast with industry analysts and reporters, CFO Tom Szkutak blamed the less-than-astronomical revenues on declining sales of video games and gaming consoles - a dip noticed across the industry. Szkutak also pointed out that last year's second quarter saw the introduction of four big-name games, including Nintendo's Wii Fit.

What's more, last year's numbers were boosted by the $52 million sale of Amazon's European DVD assets.

Yesterday, the company announced the acquisition of shoe fetishist etailer Zappos for $850 million. During today's call, Szkutak said that Zappos had about $635 million in revenue last year, and made a "small profit."

Failing to top the estimates of the Wall Street guessmen, Amazon saw its share price drop 6.2 per cent in after-hours trading. ®